Insider Secrets to Ensuring a Successful Compensation Planning Cycle

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Insider Secrets to Ensuring a Successful Compensation Planning Cycle

Guest Presenter: Jean M. CasnerManaging Partner, Crescere HR

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Insider Secrets to Ensuring a Successful Compensation Planning Cycle

Jean M CasnerManaging Partnerjcasner@crescerehr.com+1 201 787 0631

April 20, 2016 Simple HR Solutions @ Work

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Today’s TopicsI. Map the Current Process

II. A Failure to Plan is a Plan to Fail

III. If You Don’t Know Where You’re Going, How Can You Expect to Get There*

IV. Rules of the Road and Why They Matter…

V. Show Me the Money

VI. Continuous Improvement *Quote from Basil S. Walsh

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What You Will Learn

Key elements of a successful process:

• Documented process map

• Detailed project plan

• Cross-functional team

• Clear governance policy

• Updated salary planning system

• Clear and crisp communications

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I. Map The Current Process

Six Sigma Steps

A six sigma process is one in which the process is expected to be 99.99966% defect free.

Mapping Session Participants• Total Rewards

• HRBPs (at least 1 US HRBP and 1 Region/Country specific HRBP)

• HRIS

• IT

• Payroll /Shared Services

• Finance (Bonus/incentive accruals; scorecard process, etc.)

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Mapping Session Participants• Other Potential Participants

• CHRO

• Benefits

• Secretary to the Board of Directors (If Board approval required for program(s), etc.)

• Legal (draft legal documents for program(s), etc.)

• Executives, people managers and employees

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OutcomesSix Sigma Steps

A six sigma process is one in which the process is expected to be 99.99966%

defect free.

• Picture of the current process • Comprehensive timeline

• Resources involved

• Opportunities for improvement

• Steps that could be eliminated

• Highlights confusion regarding policies and practices

• Educational tool for new HR staff

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Seeing is Believing…

From This… To This…

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II. A Failure to Plan is a Plan to Fail

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Key Planning Steps• Start early – at least 8 months before “GO LIVE”

• Assign a project manager – ONE person who is accountable for the entire process

• Identify team members and define roles• Total Rewards• Performance Management• Talent Management• HRBPs• HRIS • IT• Finance• Payroll• Others, e.g., legal, tax, etc.

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Clear Governance

•Governance/approval process•Chief HR Officer (CHRO)•CEO or Go/No Go decision maker (may include BOD)

•Others…

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Governance Decision ToolsRA

PID

x Decision CEO Direct Reports to CEO Head of HR CFOExample Decision 1 D I R I

Example Decision 2 I R, P, X D, X R, I

R = Recommend A = Agree P = Perform I = Input D = Decide X = Explain

RACI

Create a Timeline

•Create a detailed timeline• Include all steps/handoffs during the process

•Start/finish dates

• Individual team members accountable for one or more specific steps in the process

•Regular meetings leading up to “Go Live” date

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III. If You Don’t Know Where You Are Going, How Can You Expect to Get There?*

*Quote from Basil S. Walsh

Considerations

*Quote from Basil S. Walsh 18

• Philosophy and/or program changes• Compensation management• Performance management• Talent management

• Market data availability

• Policy changes (if applicable)

• Communications, training needs and media

Action Items

*Quote from Basil S. Walsh 19

• Update salary planning software

• Obtain: • Company scorecard results

(if applicable)• Obtain Board of Director

approvals (if applicable)• Budget Approval - merit,

promotion, incentive/bonus pool, other adjustment, key talent, etc.

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IV. Rules of the Road and Why They Matter...

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Content/Instructions

• Deadlines and activities to be completed

• Budgets

• Important philosophies and policies• how promotions work• incentive/bonus awards

calculations, etc.

• Salary planning software training and access (salary planners only)

Expected Outcomes

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• Goals for the process

• Distribution of ratings (forced, targeted or otherwise)

• Merit awards based on pay for performance, etc.

• Market adjustments

• Key talent

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• Holdbacks

Planning Strategies

• HRBP global advance briefings

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V. Show Me the Money

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Prepare the Results

•Key metrics• Budget vs. actual spend

• Pay for performance message alignment - performance vs. compensation recommendations

• Global/Country results

• Other metrics

Present the Results

•Trends and headlines - executive summary

• Succinct• Compelling• Next steps

• Include:• Impact to the bottom line• Promotion results• Key talent impact

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Communicate the Results

•Communicate outcomes to people managers and employees• Company, department and employee results

• Employee scorecard• Difficult messages• Key Talent

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Continuous Improvement - Conduct an AAR (After Action Review)

• Conduct immediately after each year end process

• Focus on intended objectives

• All participants must contribute to the discussion

• Use open-ended questions

• Document all feedback

• Determine changes (if any) for the next cycle

• Communicate outcomes29

How Does It Work?

AAR Questions

• What was supposed to happen?

• What did happen?

• What went well?

• What needs to be changed?

• What should be done to improve the process next time?

• Closing comments (summary)

• Next steps30

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